Quote:
Originally Posted by Ken Robb
Grant did/does comment on the challenges of running a retail business. A visit to Riv H.Q. will prove that they run about as lean an operation as one can imagine: industrial space with no heat or A/C that I could see.
Probably the biggest on-going challenge is managing cash flow. I was taught long ago that "You can't sell from an empty cart" so you need inventory. Wholesale buying often requires a minimum purchase and/or prices get lower if you order larger quantities. You would like to offer widgets in all colors and sizes but you can only afford to stock one or two. How can you be sure you pick the ones that will sell? If you guess wrong and they don't move off the shelf you have no cash to buy other merchandise so maybe you have to blow them out at a loss.
Workman's Compensation and health insurance costs just went up again. If you raise prices to cover them how many of your customers will buy mail-order from overseas?
This barely scratches the surface of the many challenges a small business owner faces so when Grant shares some of them with us I don't think of it as whining. You can see his efforts at balancing inventory vs. cash flow by looking at his on-line special sale pages and occasional announcements of Sat. morning "garage sales" to convert slow-moving goods into cash to pay for fresh stuff he hopes will sell better.
At least twice in my life I considered owning a retail business but I was either too smart, too lazy or both.  |
I had a really smart accountant tell me before I opened a retail store that the three most important things are
cash flow
cash flow
cash flow
followed by inventory control and personel management.
None are much fun.
Retail ownership of any kind is the best and worst job you can have.